F4: Working Capital and Fixed Assets

Question 1

Gross Method of Discounts- if discount paid

Answer 1

Cash
Sales discounts taken
Accounts Receivable

Question 2

Net Method of Discounts- if discount paid

Answer 2

Cash

Accounts Receivable

Question 3

Gross Method of Discounts- if discount not paid

Answer 3

Cash

Accounts Receivable

Question 4

Net Method of Discounts- if discount not paid

Answer 4

Cash
Accounts Receivable
Sales discounts not taken

Question 5

To record a sales return

Answer 5

Sales R&A

Accounts receivable

Question 6

To record an uncollectible balance

Answer 6

Bad Debt Expense

Accounts Receivable

Question 7

To record a subsequent collection after a write-off: Allowance Method

Answer 7

Step 1: Reverse the write-off
Accounts Receivable
Allowance for uncollectible accounts

Step 2: Record the collection on account
Cash
Accounts Receivable

Question 8

To factor AR without recourse

Answer 8

Cash
Due from factor (security)
Loss on sale of receivable
Accounts Receivable

Question 9

How to account for donated fixed assets

Answer 9

Fixed Asset (at FMV)
         Gain on nonreciprocal transfer